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Regarding: Single-payer health care, improved Medicare for All

About fraud: an introduction

Fraud before implementation

Fraud after implementation 

Related information

About Fraud: an introduction

Profit Motive. Profit via fraud is a strong motivator for some people, whether the related system is a governmental unit or a business. See the articles below about 1) a for-profit company practicing fraud to an very high degree and 2) a so-called “non-profit” health insurance operation doing questionable financial activities.

Complexity Factor. Within our current health care not for all system it is difficult to identify, investigate, and prosecute fraud. There is much complexity within the United States' multiple types of bureaucracy.

Simplicity Possible. The implementation of Improved Medicare for All greatly simplifies the method of payment(s) for health care in the United States. That simplification automatically sets up an excellent opportunity to establish procedures and processes by which fraud can be minimized. See some notes about what can occur as part of or shortly after implementation.


Fraud Before Implementation

Examples of actions based on profit

A for-profit company practicing fraud to an very high degree

Whistleblower’s Complaint on WellCare Health Plans Unsealed

June 27, 2010 by Carol Gentry and Mike Wells; Health News Florida

“The complaint that launched a federal investigation of WellCare Health Plans four years ago by a whistleblower within the company has now been unsealed, and the picture it paints of the state’s largest Medicaid HMO contractor is grim.”

“The complaint, filed by former WellCare financial analyst Sean J. Hellein, portrays a company so ethically challenged that it rewarded employees who dumped hundreds of sick newborns and terminally ill patients from the membership rolls, thereby pumping up profits by millions of dollars.”

“It describes a company that embraced fraudulent accounting as a business model, eventually stealing between $400 million and $600 million from Medicare and Medicaid programs in several states …”

“These “ill-gotten gains were taken by deceiving, outsmarting and concealing the truth from government regulators,” …”

“Hellein, who wore a wire for more than a year to gather evidence for federal agents, says in the complaint that:”

  • “WellCare moved money between accounts to make it appear that patients’ treatment cost much more than it actually did. In some cases, the company made payments years in advance to jack up the apparent cost of care to fool states into increasing Medicaid premiums. It worked, he said.”
  • “When states made overpayment errors, WellCare didn’t pay the money back, as its contract requires. Florida Medicaid made a series of overpayment blunders that fattened WellCare’s bottom line by many millions; those who made the errors included both state officials and contractors.”
  • “Sometimes hospitals and physician groups helped WellCare hide its true spending from Medicaid programs by accepting payments through one account for expenses incurred by another. Sometimes they allowed WellCare to pay for future years’ expenses to make it appear spending for the current year was higher than it actually was.”
    • “Hellein named two hospital systems – one in Illinois and one in Florida – that he said participated in the sham arrangement, but he said it was common.”
    • “WellCare pushed expenses into certain programs – behavioral health programs in Florida and Illinois and the Healthy Kids program in Florida, a program for uninsured children of families with modest incomes – because they required repayment if the cost of treatment fell below a certain threshold.”
  • “Florida public officials were repeatedly duped by WellCare. The director of the Florida Medicaid program from 2004 to 2007, while much of the alleged fraud was going on, was Tom Arnold. He currently is Secretary of the Agency for Health Care Administration.”

“Another agency that fell for WellCare’s line was the Office of Insurance Regulation, where an actuary found nothing wrong with a WellCare subsidiary in the Cayman Islands acting as the company’s reinsurer.”

“The reinsurance arrangement enabled WellCare to bank $5 for each insured while making it appear that the cost was just 11 cents, the complaint says.”

(bolding added)

For entire article see the Miami Herald of 6/27/2010.

A so-called “non-profit” health insurance operation doing questionable financial activities

Blue Cross Has Billions in Surplus

July 22, 2010 USA Today article by Alison Young

“Non-profit Blue Cross and Blue Shield health plans stockpiled billions of dollars during the past decade, yet continued to hit consumers with double-digit premium increases, Consumers Union found in an analysis of 10 of the plans’ finances.”

“Insurers must keep surplus money to ensure they can pay policyholders’ medical bills if unexpected market conditions develop. Yet seven of the plans examined held more than three times the amount regulators consider the minimum needed to do that, according to a report being released today by the non-profit consumer group.”

“Consumers are struggling to afford health coverage,” said report author Sondra Roberto. “Those funds could be used in some cases to mitigate these rate increases.”

“The report calls on state insurance regulators to set maximum limits for surpluses. In most states, it said, regulators focus only on ensuring companies have minimum surpluses to be financially sound.”

“Alissa Fox, a senior vice president at the Blue Cross and Blue Shield Association, said this is a “dangerous” time for regulators to limit health plans’ surpluses because of great uncertainty about how insurance costs will change under the nation’s new health law. “It’s a safety net,” she said.”

“Consumers Union studied non-profit Blue Cross and Blue Shield plans because they cover one in three Americans with private insurance.”

“Examples cited in the report include:”

  • “Blue Cross Blue Shield of Arizona had a $717.1 million surplus in 2009, seven times the regulatory minimum. The plan raised rates for individual market customers by as much as 18% in 2009. “We believe the amount we have in reserves is appropriate,” spokeswoman Regena Frieden said.”
  • “Regence Blue Cross Blue Shield of Oregon had a surplus of $565.2 million in 2009, about 3.6 times the regulatory minimum. The plan raised rates on some individual plans an average of 25.3% in 2009 and 16% in 2010. Spokeswoman Angela Hult said the company lost money on its individual policies and that the surplus is “essential to protecting our members from surges in claims costs.”“

“Oregon Insurance Division Administrator Teresa Miller, whose office considered Regence’s surplus and limited its request for a higher 2010 rate hike, said: “The tough question is how much surplus is too much surplus. There is no agreement on that.”“

Source: USA Today



Fraud After


Tackling Fraud with Improved Medicare for All

We will have a simpler system of payments, which will allow the U.S. do much better on monitoring claims for possible fraud.

The simpler system will have a consistent way for submitting claims and paying claims. Within that simpler one-payer system, a consistent way can be established to notify a patient of the claim(s) that medical professionals submitted after the patient received care.

That notification has multiple benefits:

1) The patient has a record of what services they received and on what dates for their personal reference.

2) The patient can help identify any services that were not performed or were not appropriate, providing them with information to submit a fraud alert. This gives the medical professionals motivation to print that list at the time of service and give it to the patient. That action helps to ensure that there is no misunderstanding about the services that were provided that might lead to a false fraud report being submitted by the patient.

3) The patient can appreciate the costs, which can be included. Medical professionals can be motivated to explain the costs of options at the time of service ... at the same time that the risks and likely outcomes are explained. Note: There are Americans who would greatly appreciate knowing the cost of an option(s) to our society as part of the decision-making.



Related Information

Three types of bureucracy, of which all three will have their unnecessary administrative functions and activities slashed in size or completely eliminated with the implementation of single-payer health care.

Complexity or Simplicity: two choices, of which the latter will be a major contribution to the subject of fraud.



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